The latest Housing Market Monitor fourth quarter 2020 published yesterday by Banking & Payments Federation Ireland (BPFI) shows that as the role of individual Buy-to-Let investors continues to decline, accounting for less than 1% of total mortgage drawdowns in 2020, non-household buyers, including private companies, charitable organisations, and state institutions, now account for 23% of all market transactions.
Providing his analysis of the housing market, Brian Hayes, Chief Executive, BPFI further outlines that the supply-demand imbalance in the housing market will continue in 2021 as COVID-19 limits housing supply while demand remains strong especially among households less affected by the pandemic and non-household investors.
Evaluating the likely impact of COVID-19 on housing supply and demand, Mr Hayes explains that while demand for housing remains strong, there is continued uncertainty around housing supply due to reduced capacity and output in construction caused by Level 5 restriction.
The monitor also highlights that lenders continued to support the residential mortgage market in terms of mortgage market activity in 2020 with BPFI mortgage data showing that there were 35,617 mortgage drawdowns valued at €8.4 billion in 2020 and 43,151 mortgage approvals in the same period with the total value reaching €10.3 billion.
Notably nearly 44% of total mortgage approvals in 2020 took place in the last four months of the year, which is a significant potential pipeline of activity in terms of drawdowns in early 2021. The latest mortgage approvals figures show continued year-on-year growth in January 2021, rising by 2.8% compared with the same period last year, reaching €823 million.
Commenting on the market, Mr Hayes said, "Covid-19 has had a significant negative impact on the Irish housing and mortgage markets in 2020, however demand remains strong especially among households less affected by the pandemic and non-household investors. Interestingly, our most recent analysis shows a significant decline in the role of individual buy-to-let (BTL) investors in the market in recent years."
He added, "The pandemic will continue to have a negative impact on housing completions in 2021 because construction activity is not expected to fully start again until April 2021, at the earliest, assuming public health developments remain positive. However, the sector has gained more experience in terms of increasing output after the first lockdown last year, hence we expect completion numbers in 2021 to be at least similar to levels observed in 2020 at around 21,000 units."